The principles of mortgage redemption under Section 60 of the Transfer of Property Act apply to secured assets under the SARFAESI Act, and the right of redemption survives until the completion of the sale by a registered deed.

JUDGMENT :

ALOK ARADHE, J.

1. These intra Court appeals emanate from a common order dated 18.09.2018 passed by the learned Single Judge by which the writ petitions preferred by the appellants have been dismissed.

2. Facts giving rise to the filing of these appeals briefly stated are that the appellants are Companies incorporated under the Companies Act, 1956. The Karnataka State Financial Corporation (hereinafter referred to as ‘the Corporation’) is a Corporation established under the State Financial Corporations Act, 1951. The Corporation published e-auction notice in English and Regional newspapers in respect of Property No. 1014/D, Binnamangala 2nd Stage, 17th E Cross, Indiranagar, Bangalore on 27.02.2012. The auction was scheduled to be held on 31.03.2012. The appellant participated in the auction and the bid of the appellant was found to be the highest. The appellant was informed that the bid has been accepted subject to confirmation of the sale. The appellant thereafter was required to remit a sum of Rs. 20,50,000/- which was tendered by the appellant on 31.03.2012. The appellant was required to pay the balance 75% of the bid amount.

3. In the meanwhile, the borrower had submitted an application on 06.03.2012 under the one time settlement scheme. Till then, the confirmation of sale had not taken place. The borrower deposited the entire amount due to the Corporation on 26.09.2012. Thereafter, the Corporation remitted the earnest money deposit to the appellant on 22.01.2013. Being aggrieved, the appellant filed a writ petition namely W.P. No. 30220/2012 before the learned Single Judge in which a prayer was made to convey the property subject to deposit of 75% of the amount.

4. The Corporation issued another auction notice on 15.03.2012 by which the auction in respect of another property namely property bearing Nos. 467/30, 45th Cross Road, 8th Block, Sangam Circle, Jayanagar, Bangalore-560082 was scheduled to be held on 05.05.2012. The appellant also participated in the aforesaid auction and his bid was declared to be the highest. The appellant deposited 25% of the bid amount on 05.05.2012. In the meanwhile, one of the legal representatives of the borrower filed an appeal before the Debt Recovery Tribunal in which an interim order was granted by the Tribunal. By the aforesaid interim order, it was directed by the Tribunal that in case the borrower deposits a sum of Rs. 10,00,000/- the auction shall remain in abeyance. The borrower deposited a sum of Rs. 10,00,000/- on 13.05.2012. The Corporation therefore, vide communication dated 16.08.2012, informed the appellant that the auction has been temporarily cancelled. Thereafter, the appellant filed a writ petition namely W.P. No. 30221/2012.

5. However subsequently, the appeal filed by the borrower before the Tribunal was dismissed on 10.10.2014. The Corporation thereupon issued another sale notice on 25.11.2006 which was published in the newspaper dated 27.11.2016. The aforesaid sale notice was challenged by the appellant in a writ petition namely W.P. No. 63249/2016. The learned Single Judge, by a common order dated 18.09.2018, dismissed the writ petitions preferred by the appellant. In the aforesaid factual background, these appeals have been filed.

6. Learned counsel for the appellant submitted that the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the SARFAESI Act’) is a special law and has a overriding effect over any other provision of law. It is further submitted that an auction in respect of the property held under the provisions of the aforesaid Act, can be withdrawn before the sale in the auction. It is further submitted that once the sale takes place, the authority has no jurisdiction to cancel the auction. In support of aforesaid submission, reference has also been made to provisions of Rule 8 of Security Interest (Enforcement) Rules, 2002. Learned counsel for the appellant has also relie